The UAE’s stock exchanges are expected to rebound during 2019, having fallen to low levels in 2018, financial market analysts told Mubasher.
This forecasted rise coincides with the UAE government’s attempts to attract foreign investments and encourage privately-owned and family-owned firms to consider initial public offerings (IPOs), while global ratings agencies continue to affirm the UAE’s economic strength.
Factors impacting UAE bourses
The main factors which have negatively affected the ADX and DFM during the year were lacking liquidity and leading companies’ capital hikes, director of retail and high net worth (HNW) at Al Ramz Capital Marwan Shurrab told Mubasher.
Companies restructures, particularly those who were forecast to declare bankruptcy, also impacted bourses, he added.
Al Ramz Capital’s official further indicated that the UAE’s banking sector was still the best performer in 2018 after several stocks achieved strong growth on the back of the Central Bank of the UAE’s interest rate increases as well as a decline in provisions.
For 2019, Shurrab said that the outlook was optimistic as stock prices were low and attractive, while the UAE government had announced more spending schemes on projects where listed companies often participate, which in turn would support these companies’ financial positions.
Meanwhile, Lennie Assad, associate and advisor at Allied Investment Partners, projected that the strong assets in the real estate and banking sectors were likely to attract more investors in 2019.
The ongoing trade war between the US and China was one of the major factors that negatively impacted the UAE’s bourses during the year, Assad added.
As for Abu Dhabi-listed stocks, Mindcraft Consultants founder and CEO Fadi El Ghattis told Mubasher that the decision by the bourse’s management to upgrade trading regulations, in addition to launching the short-selling option, were likely to boost liquidity in the coming sessions.
El Ghattis said he hoped that both the DFM and ADX would continue to issue similar decisions to attract a new range of traders and accordingly help support market activity.